The IRS previously released the 2018 tax brackets (a tabled breakdown of the IRS federal income tax rates) and standard deduction amounts, with a number of inflation adjustments over the 2017 tax brackets and standard deductions.

But you can throw those out the window. With the Republican Tax Cut & Jobs Act (tax reform), the 2018 tax brackets, tax rates, and standard deduction amounts have all been revised, as updated below.

Since we’re still focused on 2017 for tax filing purposes, the 2017 tax brackets are going to be of most interest to you when you do your upcoming taxes, so I have included those as well. They are not impacted by the tax reform. Armed with the below information, it would be an excellent time to calculate what your modified adjusted gross income will likely be next year and modify your tax allowances on your W4 form. This will help prevent being penalized for underpayment of taxes or getting a refund (which is really a form of self penalization by letting the government borrow your money, interest-free).

2017 Tax Brackets (IRS Federal Income Tax Rates)

In the tables below, it is important to note that the highlighted rates represent the income tax rate owed for the portion of your taxable income that falls into that bracket. As an example, if you are single and your taxable income is $50,000, your tax tax rate on your first $9,275 of taxable income is 10%, while taxable income between $9,325 and $37,950 is taxed at 15%, while income from $37,950 to $50,000 would be taxed at 25%.

Many taxpayers incorrectly assume that if your total income peaks at the 35% tax bracket, for example, all of your income is taxed at that rate. That is not true. The United States federal income tax system is a “progressive” system and the result is your actual tax rate is less than the tax rate in the top bracket you are in. With that in mind, here are the 2017 tax brackets:

Tax Rates

Single Filer Tax Brackets

Married Filing Jointly Tax Brackets

Married Filing Separately Tax Brackets

Head of Household Tax Brackets

10%

$0-$9,325

$0-$18,650

$0-$9,325

$0-$13,350

15%

$9,325-$37,950

$18,650-$75,900

$9,325-$37,950

$13,350-$50,800

25%

$37,950-$91,900

$75,900-$153,100

$37,950-$76,550

$50,800-$131,200

28%

$91,900-$191,650

$153,100-$233,350

$76,550-$116,675

$131,200-$212,500

33%

$191,650-$416,700

$233,350-$416,700

$116,675-$208,350

$212,500-$416,700

35%

$416,700-$418,400

$416,700-$470,700

$208,350-$235,350

$416,700-$444,550

39.6%

$418,400+

$470,700+

$235,350+

$444,550+

2017 Standard Deductions & Dependent Exemptions

Standard deductions can lower your taxable income by allowing you to deduct from your taxable income, if you decide not to itemize taxes.

Aside from the standard deductions, there are income tax exemptions that can be claimed, whether you itemize your taxes or take the standard deduction. You can take one exemption for yourself unless you can be claimed as a dependent by another taxpayer. If another taxpayer is entitled to claim you as a dependent, you cannot take an exemption for yourself even if the other taxpayer doesn’t actually claim you as a dependent.

You can also claim an exemption for each dependent. Note that a spouse can never be claimed as a dependent.

Here are the 2017 standard deduction and exemption amounts:

Filing Status:

Deduction Amount:

Single

$6,350

Married Filing Separately

$6,350

Married Filing Jointly

$12,700

Head of Household

$9,350

Personal Exemption

$4,050

2018 Tax Brackets (IRS Federal Income Tax Rates)

Here are the new 2018 tax brackets:

Tax Rates

Single Filer Tax Brackets

Married Filing Jointly Tax Brackets

Married Filing Separately Tax Brackets

Head of Household Tax Brackets

10%

$0-$9,525

$0-$19,050

$0-$9,525

$0-$13,600

12%

$9,525-$38,700

$19,050-$77,400

$9,525-$38,700

$13,600-$51,800

22%

$38,700-$82,500

$77,400-$165,000

$38,700-$82,500

$51,800-$82,500

24%

$82,500-$157,500

$165,000-$315,000

$82,500-$157,500

$82,500-$157,500

32%

$157,500-$200,000

$315,000-$400,000

$157,500-$200,000

$157,500-$200,000

35%

$200,000-$500,000

$400,000-$600,000

$200,000-$300,000

$200,000-$500,000

37%

$500,000+

$600,000+

$300,000+

$500,000+

2018 Standard Deductions & Exemptions

And the 2018 standard deduction and exemption amounts. Note that the personal exemption is completely eliminated:

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36 Comments

Michael

2018 is going to be an interesting year for us as a newly married couple. As single filers, I was 28%, my wife 25%. With my new job, filing jointly we’re looking at 28%, creeping into 33% if we’re being careless. Hooray for the marriage penalty?

Maybe I’m misinformed on the 2018 tack brackets. There is no 28% or 33% for that matter. It’s 24% and 32%. Married filing jointly to qualify for the 32% you would need to have combined income of 315K. Given what your prior details/assumptions were I think you just received a significant tax break. 🙂

Yes it does seem unfair. But, I’m assuming you and your spouse live under one roof so you are splitting costs such as mortgage, property taxes, utilities, etc. Not to mention memberships that give discounts to couples as if we were living in the times when there was only one bread winner. My guess is when you factor in these savings, you are coming out ahead.

Joseph,
2) $4050 per person exemptions are eliminated for 2018 but bracket amounts and percentages are adjusted so that (in my case) total tax is slightly less.
4) Standard deduction is raised to $24K but you can still itemize to take credit for your total ($40.8K) deduction.

I live in Connecticut and if nothing changed in my income in 2018, because of the loss of personal exemption $8100,for my wife and me, plus capping tax deductions at $10,000, we will pay almost $4000 more in taxes on same income. Not much of a tax break!

High cost states like NY, CA, CN and NJ take advantage of the tax write-off to spread their tax burden onto those living elsewhere rather than improving the efficiency of their own governments.

Those who live in states with high income & RE taxes shouldn’t expect those living in lower cost states to subsidize their tax burden. I live in San DIego, CA and I am willing (if not happy) to pay the high taxes imposed by wasteful state policies because, in balance, its worth the added cost for me to live here. Prop 13 stabilized RE taxes to a large degree but escalating CA RE prices still drive them up on new sales. I prefer living in CA over Nevada, which has no state income tax & lower property taxes, so I don’t expect Nevadans to subsidize my increasingly expensive state via a higher federal tax,

The bottom line is we can always vote with our feet!

When the cost/benefit ratio becomes intolerable in CA, I will move to a state that treats my wealth more gently.

SD You are fortunate that you are mobile enough to move when you want to. Wish you luck with that. We have family and ties where we can’t move at will, We are pretty much stuck. Not looking for sympathy, just saying i feel we are sold a bill of goods about the tax break.

At the federal level, it’s quite the opposite. Those in high income states as those you listed more than pay their share of federal taxes. They are net outflow. Whereas low income states are net inflow. There already was a wealth redistribution from those states to other states, made worse by “reform”.

Ssi has never been taxed at an 85% rate, 85 % of your ssi could be subject to taxation based upon your overall agi…pay attention to how you vote and what you want your govt to do, if not careful you will get what you ask for, but it will cost you…front door or back door of the irs!

Because in essence this new tax plan sucks. The 24k standard deduction does nothing for me and my wife. I have to adjust my w-4 card and have an extra 200 per month taken out of my pension to account for the few dollars in less taxes taken out each month now. They give it to you in one hand and they will take double back with the other. Losing the personal exemption is devastating. This is worse than under bush plan back in 2006 when everyone got a 300.00 check. When married couples filed I personally had to pay the gov’t. 720.00 that year.

I’ll still itemize for my 2018 taxes and be just over 12k in deductions even though deductibility of home equity interest was eliminated. Between losing the personal exemption and the home equity interest deductions I’ll have another $5700 of income taxed in 2018.

Yes, high tax states like New York, where I live but not for long! So, should all the other states be denied tax credits because a few states are runamuck with corruption? I think those states should be looking at their governor e.g., New York that hit number 1 most corrupt state in the country! Or maybe take a peak at the cost of the ads governor Cuomo is running, I think the start up NY ads alone are totaling 53million. Total jobs created a whopping 76!! That’s just a small piece of the pie! Drain the swamp New York, you being robbed!

Very true. NY, NJ residents get murdered. People who pay 15-20k in real estate taxes can only deduct up to 10k. That’s a major screwing and means they can’t deduct state & local taxes paid and real estate taxes. No more personal exemptions which means instead of $4100 per defendant you get 0. Imagine a family of 4 losing $16,400 write-off for exemptions. Tax plan is a disgrace.

You better go back read the table. It’s not possible that your tax rate will increase to 22% if your currently in the 15%. Assuming your making the same money. You could be getting a bonus which would bump part of your income into next bracket.
If you made $40k you would only pay 22% on $1300 of the $40k, since the limit is $38700.

I am in the same boat. Married jointly itemizing deductions cannot get below the 77k limit there for we are getting bumped from 15 percent to 22 percent. Not a good deal. Wonder why such a big gap from 12 to 22 percent. Oh yeah most of us fall into what was 15 percent in 2017. Therefore the biggest group will get a tax increase. Right? Maybe I have it wrong somehow…

They should of left the individual Deduction the same so people that Itemized could still do that if they wanted to. I’m making $39,ooo and itemize deductions and next year I can’t because they are eliminating the individual deduction of $4050. I thought this was suppose to help lower income earners!! I’m going to have to pay approximately on $2000 more of my income!! What is wrong with our government!! They should of seen this and made sure if you make at least less than $50,000 you could still take the individual deduction too!! Drain the swamp!!

re: Steve-o: Making $233k is by no means “easy street” for a family. First, you give half back w/ federal, state, local, real estate taxes, and then factor in a mortgage and the cost of raising kids. We also pay our own health insurance at $1500 / month, and have high deductibles including $550 for an emergency room visit. Did i mention 3 kids w/ braces, sports, and summer camps? Plus, Trump tax cuts will benefit big business, but not us!

High tax states have been exposed, all those wonderful feel good programs are expensive and the feds are saying fine – you own it now. The problem is not the tax bill it is the state government’s choices.

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